Homeowner’s Guide to Heat Pumps: Everything You Need to Know

2023 is quickly becoming the Year of the Heat Pump in the United States. These HVAC systems have been around for decades. But, the latest models are much stronger and more versatile. And, thanks to rebates and incentives from the federal government and local utilities, they’re more affordable than ever.


If you’re looking to replace your home’s current heating and cooling system, you may be very curious about how they work.

This article will give you everything you need to know about these systems. I’ll start by explaining just what a heat pump is, how it works, and the components that go into one.

Then I’ll go through the different types of heat pumps, tell you how to measure their energy efficiency, and then compare them to traditional heating and cooling.

What you’re reading is informed by more than a decade of research and professional work. I’ve been a product manager for HVAC distributor Peirce Phelps for more than a decade.

I specialize in high-efficiency equipment and the latest heating and cooling innovations. And, I communicate all the time with dozens of HVAC contractors throughout Pennsylvania, New Jersey, Maryland, and Delaware. Combined, they’ve installed thousands of these systems.

Part of the job is keeping each other updated about the questions consumers ask and the information they need.

In fact, you can schedule a free consultation with a certified local HVAC contractor in any of the states I mentioned. Use the dealer locator button to find one in your area.

What is a Heat Pump?

A heat pump is an HVAC system that works by transferring heat energy from one location to another. It doesn’t burn fossil fuels to generate heat, and it can switch between heating and cooling modes.

Heat pumps are made up of several key components, including a compressor, a heat exchanger, and refrigerant lines. They can be powered by electricity, natural gas, or propane, depending on the specific model and installation.

How Does a Heat Pump Work?

The heat pump cycle uses the principles of thermodynamics to transfer heat energy from one location to another. During the heating cycle, the heat pump extracts heat energy from the outdoor air or ground and transfers it into your home. During the cooling cycle, the heat pump removes heat energy from your home and transfers it outdoors.

Heat Transfer Process

The heat transfer process is the fundamental principle behind a heat pump system. Heat energy naturally flows from hot to cold areas, and a heat pump uses this principle to move heat energy from one place to another.

In a heat pump system, there are two main components: an indoor and an outdoor unit. The two work together to move heat either in or out of the house. They’re connected by lines that run a refrigerant liquid between them.

Refrigeration Cycles

The mechanical-compression cycle refrigeration system is used in heat pumps to move heat energy. The refrigerant is a special fluid that is used to transfer heat energy between the two heat exchangers.

The refrigeration cycle starts when the refrigerant absorbs heat, or thermal energy. This causes the refrigerant to evaporate into a gas. The gas can then move from one part of the system to the other, taking the heat with it.

At that point, a unit releases the heat energy, which gets absorbed into the air around it. The refrigerant then condenses back into a liquid and the process repeats.

How a Heat Pump Works In Heating Mode

A heat pump in heating mode extracts heat from the air outside and releases it into the indoor air. Today’s strongest models use high pressures to use what little heat is available even in subfreezing temperatures.

The refrigerant absorbs heat energy from the outdoor unit’s heat exchanger and evaporates into a gas. This gas then moves to the indoor air handler unit. That component releases the heat energy into the indoor air, heating it up.

The refrigerant then condenses back into a liquid and repeats the cycle.

How a Heat Pump Works In Cooling Mode

The system working by reversing the flow between the indoor and outdoor units when it’s acting as an air conditioner. Now, the refrigerant absorbs heat energy from the indoor unit’s heat exchanger when it draws in warm air from the room. The air handler also reduces humidity levels in the room to make the area more comfortable.

The refrigerant evaporates, and the gas moves to the outdoor unit. There, the heat pump releases the heat energy into the outside. The refrigerant condenses back into a liquid and repeats the cycle.

Types of Heat Pumps

The three types of heat pumps use air, the ground, or water as heat sources, respectively. I’m focusing on the first two in this article because water-source models are rarely used residentially or even in small commercial settings.

Air-source Heat Pumps

Air-source models use the air outside your home to heat or cool the air inside. They’re the most common in homes. These systems are less expensive to install than ground-source heat pumps, and can use a home’s existing ductwork with an indoor air handler.

Ground-source Heat Pumps

Ground-source, also known as geothermal, heat pumps, use the constant temperature of the earth to heat or cool your home. They’re highly efficient but are more expensive to install than air-source models and require a significant amount of land to install the necessary piping. However, they can last up to 50 years.

Ductless Mini Split Heat Pumps

Ductless mini split heat pumps use an air-source heat pump combined with air handlers mounted in different parts of the house. They don’t require any ductwork and so they’re much more customizable than a centralized system using ductwork.

Heat Pump Components

A heat pump system consists of two main components: the outdoor unit and the indoor unit. Both units work together to transfer heat energy from one place to another, either from the air outside to the inside of a building or from the inside to the outside.

Outdoor Unit

The parts of a heat pump in the outdoor unit include the compressor, fan, and coils.


The compressor is the heart of the heat pump system. It is responsible for compressing and circulating refrigerant throughout the system. As the refrigerant flows through the compressor, its temperature and pressure increase.


The fan is responsible for drawing outdoor air across the outdoor coil. As the air passes over the coil, heat is transferred from the air to the refrigerant inside the coil. The fan then blows the cooled air back into the surrounding environment.

Condenser Coil

The condenser coil is a component in the outdoor unit of a heat pump system responsible for releasing heat absorbed from the indoor air. The refrigerant flows through the condenser coil and releases heat to the outdoor air.

The fan in the outdoor unit helps to disperse the heat into the environment. The outdoor unit also contains various controls, such as pressure switches and temperature sensors, that help to regulate the operation of the heat pump.

Indoor Unit

The indoor unit of a heat pump system includes the air handler and evaporator coil. The air handler contains the motorized fan that blows air through the system, and the evaporator coil that absorbs heat from the indoor air.

Evaporator Coils

The evaporator coil is a critical component in the heat transfer process. It is responsible for absorbing heat from the indoor air, allowing it to be transferred to the outdoor unit for disposal.

As warm air passes over the evaporator coil, the refrigerant inside absorbs the heat, changing from a liquid to a gas.


Refrigerant is a substance used in the heat transfer process to absorb and release heat. The most commonly used refrigerant in heat pump systems is R-410A, which is an environmentally friendly refrigerant.

Expansion Valve

The expansion valve is a critical component in the refrigeration cycle. It is responsible for regulating the flow of refrigerant into the evaporator coil, allowing for efficient heat transfer.

Reversing Valve

The reversing valve is a unique component in a heat pump system that allows it to switch between heating and cooling modes. In heating mode, the reversing valve allows the refrigerant to flow in the opposite direction, bringing warm air into the home.

In cooling mode, it allows the refrigerant to flow in the normal direction, removing warm air from the home.


There are two types of coils in a heat pump system: the outdoor coil and the indoor coil. The outdoor coil is located in the outdoor unit and is responsible for absorbing heat energy from the surrounding air.

The indoor coil is located in the indoor unit and is responsible for releasing heat energy into the indoor environment.

Heat Pump Efficiency and Performance

Heat pump efficiency is determined by two ratings: Heating Seasonal Performance Factor (HSPF) and Seasonal Energy Efficiency Ratio (SEER).


HSPF measures the heating efficiency of the heat pump in heating mode. It is the ratio of the total heating output during a heating season to the total electricity used by the heat pump during that season. A higher HSPF rating means more efficient heating.


SEER measures the cooling efficiency of the heat pump in cooling mode. It is the ratio of the total cooling output during a cooling season to the total electricity used by the heat pump during that season. A higher SEER rating means more efficient cooling.

Factors that affect heat pump efficiency and performance

Several factors can impact the efficiency and performance of a heat pump.


In colder regions, the heat pump may struggle to extract heat from the outdoor air when the temperature drops too low. It may also need more energy to work harder in extreme heat. Fortunately, the mid-Atlantic states in the U.S. have a moderate climate that doesn’t put extra stress on the system.


The size of the heat pump should match the heating and cooling needs of the home. If the heat pump is too small, it works harder to meet the demand. That leads to decreased efficiency and increased wear and tear.

If it’s too large, it will cycle on and off frequently, wasting energy and decreasing its lifespan.

Home Insulation

Good home insulation is essential for maintaining heat pump efficiency. Insulated walls, ceilings, and floors help keep warm air inside during winter and outside during summer. The insulation reduces the heat pump’s workload. You’ll use (and pay for) less electricity, and have less wear and tear on the system.

Heat Pumps Vs. Traditional HVAC

Now that you have an excellent understanding of how heat pumps work, let’s see how they compare to traditional HVAC setups.

Forced-Air Furnaces and Central Air

Forced-air furnaces and central air conditioning systems are the most common types of HVAC systems found in homes.

One of the main differences between heat pumps and traditional HVAC systems is that furnaces burn fuel or use electricity to create heat. But, a heat pump only transfers heat from one place to another. That process is much more energy-efficient than combustion.

Both systems can use forced-air and ductwork as a centralized systems. But, a mini split heat pump can use multiple thermostats to treat each zone in our home separately.

Baseboard Heaters

Like a heat pump, baseboard heaters give you zone control: Each room has a separate unit that you can set to any temperature you like. But, baseboard heaters can’t produce cooling are more expensive to operate since they use electricity to generate heat.

Window or Portable Air Conditioners

Window and portable air conditioners use a compressor to cool and dehumidify the air in a single room rather than an entire home. Window and portable air conditioners are relatively inexpensive. However, these systems are louder, less convenient, don’t offer heat, and cost more to run.

Want to find reliable heat pump installers for your Lancaster, PA home or anywhere in the Mid-Atlantic region? Use our dealer locator to find a certified HVAC installer in Pennsylvania, Delaware, Maryland, or New Jersey.